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Subject: International HRM

Chapter: The organizational Context

Class: bba-8
Ch-02
By
Syed Zohaib Hassan Kazmi

Recommended Book: International HRM by Peter j. Dowling(5th ed.)

Reference book: International HRM by Tony Edward

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 Introduction
 In this chapter we examine how international growth places de
mands on management, and the factors that impact on how m
anagers of internationalizing firms respond to these challenge.
 We start with the idea that the HR function does not operate
in a vacuum,, and that HR activities are determined by and infl
uence, organizational factor.

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 Objectives of this chapter
Learn these key findings and themes:
1.Definitions of culture
2.Cultural concepts
3.Results of various intercultural mgmt. studies:
Hofstede, GLOBE, Trompenaars, & others
4.Reflections on cross-cultural mgmt. research
5.Development of cultures

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 Understanding culture
 A culture refers to a system of shared meaning held by the organization’s
members that distinguishes the organization from other organizations.

 Culture is understood as the customs, beliefs, norms and values that guide the
behavior of the people in a society and that are passed on from one generation
to the next.

 Organizational culture encompasses values and behaviors that "contribute to the

unique social and psychological environment of an organization“

 The values and behaviors that contribute to the unique social and psychological
environment of an organization.

 Organizational culture includes an organization's expectations, experiences,

philosophy, and values that hold it together, and is expressed in its self-image,
inner workings, interactions with the outside world, and future expectations. It is
based on shared attitudes, beliefs, customs, and written and unwritten rules that
have been developed over time and are considered valid. Also called corporate
culture.

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 Understanding culture (con…)
 Culture is the Centre of a society and without culture no society can
even exist.
 It is the main difference between human beings and animals.
 It is a heritage transmitted from one generation to another.
 It includes all the ways and behaviors is social life.
 Man is born in the environment of culture, in which he seeks his
way of behaving and acting in a given society
1. Horton and Hunt definition of culture, “Culture is everything which is socially
shared and learned by the members of a society.”

2. Tylor defined “It is that complex whole including beliefs, art, region, values,
norms, ideas, law, taught, knowledge, custom and other capabilities acquired by
a man as a member of a society.”

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 Organizational Culture - Functions
 It has a boundary, defining role that creates a distinction between
one organization to others.
 It conveys a sense of identity for organization members.
 Culture facilitates the generation of commitment to something
larger than one’s individual self-interest.
 It enhances the social system stability. Culture is the social value
that helps hold the organizations together.
 The culture serves us a sense-making and control mechanism that
guides and shapes the attitudes and behaviors of employees.
 Culture enhances the organizational commitment and increases the
consistency of employee behavior.
 Culture reduces ambiguity among its members.

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 CULTURE CHANGE

 Culture is always changing as organizations adds new techniq

ues to the old, constantly modifying and improving them, disca
rding what no longer seems useful and acceptable.
 The changes that occur within the society are brought about b
y discovery and invention, while the changes originating from
outside are a result of culture borrowing.

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 Features & Characteristics of Culture
Some of the important characteristics of culture has been cited below.

 1. Culture is learned: Culture is not inherited biologically but it is leant socia

lly by man in a society. It is not an inborn tendency but acquired by man from
the association of others, e.g. drinking, eating, dressing, walking, behaving, r
eading are all learnt by man.
 2. Culture is social : It is not an individual phenomena but it is the product o
f society. It develops in the society through social interaction. It is shared by t
he man of society No man can acquire it without the association of others. M
an is man only among men. It helps to develop qualities of human beings in
a social environment. Deprivation of a man from his company is the deprivati
on of human qualities.
 3. Culture is shared: Culture is something shared. It is nothing that an indivi
dual can passes but shared by common people of a territory. For example, c
ustoms, traditions, values, beliefs are all shared by man in a social situation.
These beliefs and practices are adopted by all equally.

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 Features & Characteristics of Culture
 4. Culture is transmitted: Culture is capable of transmitted from one gener
ation to the next. Parents papas cultural traits to their children and in return t
hey pass to their children and son on. It is not transmitted through genes but
through language. Language is means to communication which passes cultu
ral traits from one generation to another.
 5. Culture is continuous: It is continuous process. It is like a stream which i
s flowing from one generation to another through centuries. “Culture is the m
emory of human race.”
 6. Culture is accumulative: Culture is not a matter of month or a year. It is t
he continuous process and adding new cultural traits. Many cultural traits are
borrowed from out side and these absorbed in that culture which adopt it, as
culture is accumulative and combines the suitable cultural traits.
 7. Culture is integrated: All the cultural aspects are inter-connected with ea
ch other. The development of culture is the integration of its various parts. F
or example, values system is interlinked with morality, customs, beliefs and r
eligion.
 8. Culture is changing: It remains changing but not static. Cultural process
undergoes changes. But with different speeds from society to society and ge
neration to generation. 10
 Importance of Culture
International managers need to know about cultural differences a
mong nations in order to be able:
 To communicate effectively with customers, suppliers partners in oth
er countries.
 To conduct negotiations and understand the hint of the bargaining atti
tude .
 To predict trends in social behavior
 To understand ethical standards and concepts of society
 To predict how cultural differences will affect consumer reactions to a
dvertisements and other promotional forms.

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 Elements of Culture

Language

Social Structure Communication

Culture

Values/ Attitudes Religion

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 Social Structure
When a culture organize its members into smaller groups

 What might some smaller groups be in a culture?

(Families, Friends, Religious groups, Social classes)
 Family: The most important unit of social organization
 Nuclear family- husband, wife, children .

 Also called single-parent family

 Extended family- several generations in one household

- respect for elders is usually strong in extended families.

Also called joint family system
 Social classes: A way to rank people in order of status
 What can social class be based on?
 Money, Occupation, Education, Race, etc.

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 Communication
Communication is simply the act of transferring information from one pl
ace to another.
 Verbal communication refers to form of communication which uses
spoken and written words for expressing and transferring views and
ideas. Language is the most important tool of verbal communication
and it is the area where cultural difference play its role. All countries
have different languages and to have a better understanding of
different culture it is required to have knowledge of languages of
different countries.
 Non verbal communication is a very wide concept and it includes all
the other forms of communication which do not uses written or
spoken words.
 failing to understand the nonverbal cues of another culture can lead to
communication failure

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 Forms of Nonverbal Communication

 Hand gestures  Touching

 Facial expression  Eye contact
 Clothing/ hair style  Speech rate, pitch, volum
e
 Walking behavior
 Color symbolism
 Interpersonal distance
 Sound signals
 Silence

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 Language
 3000+ different languages worldwide
 Language reflects the nature and values of society. There may
be many sub-cultural languages like dialects ‫ بولیوں‬which may
have to be accounted for. Some countries have two or three la
nguages.
 Important for communication and passing on traditions and bel
iefs
 English is the common language of international business
 knowledge of the local language is still beneficial, and in some
cases, critical for business success.

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 Language differences
 The old saying "words have different meanings in different countries”.
These are called "word warps" meaning a word that means two differen
t things in two languages.
 Korea what quality means, they’ll say, ‘it’s brand new (newness is importa
nt)
 “In Japan what quality means, they’ll say, ‘it’s perfect - zero defects’ (perf
ection)
 “In China, what quality means, they’ll say, ‘it gives status’. (raises your soc
ial status)

 In cross-cultural communication Japan is known as a highly “nonverbal”

 in contract the U.S., an extremely “verbal” culture
 Mexican culture falls somewhere in between on the scale, but is far more ver
bal than Japan.
 In English "gift" is a present, something positive. In German, "gift" means poi
son.

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 Language differences
First floor
 What it means in the U.S.: The floor at ground le
vel.
 What it means in the U.K.: The floor above the gr
ound level floor.
Potentially confusing sentence: “That super-impo
rtant meeting is taking place on the first floor — do
n’t be late!”

Bin
 What it means in the U.S.: A storage container.
 What it means in the U.K.: A trash can.
Potentially confusing sentence: “I put all my gra
ndmother’s valuables in a bin.”

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 Example of Coca-cola

Coca-Cola’s name in China was first read as “Kekoukel

a”, meaning “Bite the wax tadpole” or “female horse st
uffed with wax”, depending on the tongue.

Coke then researched 40,000 characters to find a phone

tic equivalent “kokou kole”, translating into “happiness
in the mouth.”

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 Religion
 Religion provides the best insight into a society's behavior an
d helps answer the question why people behave rather than
how they behave.

 Monotheism: belief in one God

 Polytheism: belief in more than one God

 Major World Religions

 Islam , Judaism, Christianity, Hinduism, Buddhism

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 Attitudes and values

 Values: accepted principles and standards

 Values are basic convictions that people have regarding what is right a
nd wrong, good and bad, important and unimportant.
 These values are learned from the culture in which the individual is rea
red, and they help direct the person’s behavior.

 Attitudes: actions, feelings, and thoughts that result from value

s
 Values often have a religious foundation, and attitudes rela
te to economic activities.

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 How Does Culture Impact The Workplace?( Cultural Dimensions)

 Management processes and practices must be adapted to culturally-determin

ed work-related values
 Geert Hofstede identified four dimensions of culture
1. Power distance: (high versus low)
 Power distance is the degree to which less powerful members of organizatio
ns accept the fact that power is not distributed equally.
 Hierarchy and power inequality are considered appropriate and beneficial. Th
e superiors are expected to take care of the subordinates, and in exchange f
or that, the subordinates owe obedience, loyalty, and deference to them, muc
h like the culture in the military
 People in societies where authority is obeyed without question live in a high
power distance culture.
 Many Latin and Asian countries, Malaysia, Philippines, Panama, Guatemala,
Venezuela, and Mexico were typified by high power distance.
 United States, Canada and many European countries such as Denmark, Gre
at Britain, and Austria had moderate to low power distance.

3-
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 1. Power distance (con…)
 In countries with high power distance, managers make autocratic and patern
alistic decisions and the subordinates do as they are told. Typified by close c
ontrol of operations and a fairly weak work ethic.
 In low power distance countries such as Israel, Denmark, and Ireland, pe
ople value equality and seek to minimize or eliminate various kinds of social
and class inequalities. They value democracy, and juniors and subordinates
are free to question or challenge authority. Most low power distance cultures
are also individualistic societies
 Organization structures tend to be tall and managers have relatively few sub
ordinates reporting directly to them.
 In Low Power distance, people put a high value on independence, managers
consult with subordinates before making decisions, and there is a fairly stron
g work ethic.
 Organization structures tend to be flat.

 Paternalism means taking all the decisions for the people you govern, employ, or are respons
ible for, so that they cannot or do not have to make their own decisions
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 BUSINESS EXAMPLE

PD Characteristics Tips

High PD •Centralized companies. •Acknowledge a leader's po

•Strong hierarchies. wer.
•Large gaps in compensatio •Be aware that you may ne
n, authority, and respect. ed to go to the top for answ
ers

•Flatter organizations. •Use teamwork.

•Supervisors and employee •Involve as many people as
Low PD s are considered almost as possible in decision making.
equals.

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 2. Uncertainty avoidance:
 Uncertainty avoidance is the extant to which people feel threatened by ambi
guous situations and have created instructions and beliefs for minimizing or
avoiding these uncertainties.
 Countries with high uncertainty avoidance try to reduce risk and to develo
p systems for dealing with ambiguity.
 They are governed by rules and order and they seek a collective "truth.“
 People from high uncertainty avoidance cultures, such as many Latin Americ
an cultures, Mediterranean cultures, and some European (e.g., Germany, Po
land) and Asian cultures (e.g., Japan, Pakistan) tend to have greater need fo
r formal rules, standards, and structures. Deviation from these rules and stan
dards is considered disruptive and undesirable. They also tend to avoid confl
ict, seek consensus, and take fewer risks.
 Countries with high uncertainty avoidance tend to formulize organizational a
ctivities and depend heavily on rules and regulations to ensure that people k
now what they are to do.
 In low uncertainty avoidance cultures, such as China, Jamaica, and the U
nited Kingdom, people are more comfortable with unstructured situations. Un
certainty and ambiguity are considered natural and necessary. They value cr
eativity and individual choice, and are free to take risks. 25
 BUSINESS EXAMPLE
UAI Characteristics
High UAI •Very formal business conduct with lots of
rules and policies.
•Need and expect structure.
•Sense of nervousness reject high levels of
emotion and expression.
•Differences are avoided.
Low UAI •Informal business attitude.
•More concern with long term strategy than
what is happening on a daily basis.
•Accepting of change and risk.
Tips
•Be clear and concise about your ex
pectations and parameters.
•Plan and prepare, communicate oft
en and early, provide detailed plans,
and focus on the tactical aspects of
a job or project.
•Express your emotions through ha
nd gestures and raised voices.
•Do not impose rules or structure un
necessarily.
•Minimize your emotional response
by being calm and contemplating sit
uations before speaking.
•Express curiosity when you discov
er differences.
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 3. Individualism:
 Individualism is the tendency of people to look after themselves and their im
mediate family only.
 This dimension is in direct contrast with collectivism, the tendency of peo
ple to belong to groups that look after each other in exchange for loyalty.
 Autonomy and individual financial security are given high value, and people
are encouraged to make individual decisions without reliance on strong grou
p support.
 Hoftstede’s findings show that the wealthy countries have higher individualis
m scores and poorer countries higher collectivism scores. (GNP based wealt
h)
 People in collectivistic societies, such as most of Latin American, African,
and Asian countries, and the Middle East, emphasize the obligations they ha
ve toward their in group members, and are willing to sacrifice their individual
needs and desires for the benefits of the group. They care about their relatio
nships with in-groups, often by treating them differently than strangers or out
-group members, which is also known as particularism

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 BUSINESS EXAMPLE
IDV Characteristics
High IDV •High valuation on people's tim
e and their need for freedom.
•An enjoyment of challenges, a
nd an expectation of rewards fo
r hard work.
•Respect for privacy.
Low IDV •Emphasis on building skills an
d becoming masters of somethi
ng.
•Work for intrinsic rewards.
•Harmony more important than
honesty.
Tips
•Acknowledge accomplishments
.
•Don't ask for too much persona
l information.
•Encourage debate and express
ion of own ideas.
•Show respect for age and wisd
om.
•Suppress feelings and emotion
s to work in harmony.
•Respect traditions and introduc
e change slowly.
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 4. Masculinity:
 In masculine cultures, such as Mexico, Italy, Japan, and Australia, tough v
alues – such as achievements, ambition, power, and assertiveness ‫جارحان‬
‫ – ہ پن‬are preferred over caring values – such as quality of life and compassi
on for the weak.
 Additionally, gender roles are generally distinct and complementary, which
means that men and women place separate roles in the society and are exp
ected to differ in embracing these values. For instance, men are expected to
be assertive, tough, and focus on material success, whereas women are exp
ected to be modest and tender, and focus on improving the quality of life for t
he family.
 In feminine cultures, such as most of Scandinavian cultures, genders roles
are fluid and flexible: Men and women do not necessarily have separate role
s, and they can switch their jobs while taking care of the family. Not only do f
eminine societies care more about quality of life, service, and nurturance, bu
t such caring values are embraced by both men and women in the society.

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 4. Masculinity: (con…)
 Masculinity is the degree to which the dominant values of a society are “succ
ess, money, and things.
 In contrast, femininity is the term used by Hofstede to describe a situation in
which the dominant values in society are caring for others and the quality of l
ife..
 The distribution of emotional roles between the genders". Masculine cultures
' values are competitiveness, materialism, ambition and power, whereas fe
minine cultures place more value on relationships and quality of life.
 High MAS scores are found in countries where men are expected to be "tou
gh," to be the provider, and to be self-confident. If women work outside the h
ome, they tend to have separate professions from men.

 Masculinity and femininity are the terms that are often used to identify a set of characteristics, values, and
meanings related to gender. In our society, the values tied to masculinity have been generally seen as superi
or to those associated with femininity.
 A masculine culture is made up of male gender roles that focus on values such as money, success, and co
mpetition. These cultures consist of a need for power, assertiveness, dominance, and wealth and material su
ccess

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 BUSINESS EXAMPLE

MAS Characteristics Tips

High MAS •Men are masculine and wome
n are feminine.
•There is a well defined distincti
on between men's work and wo
men's work.
•Be aware that people may exp
ect male and female roles to be
distinct.
•Advise men to avoid discussing
emotions or making emotionally
based decisions or arguments.

Low MAS •A woman can do anything a m
an can do.
•Powerful and successful wome
n are admired and respected.
•Avoid an "old boys' club" menta
lity.
•Ensure job design and practice
s are not discriminatory to either
gender.
•Treat men and women equally.

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 Figure 2.1
Hofstede study: Power distance & individualism vs. collectivism

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Impact of the cultural context on HRM practices
Table 2
.1

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 Future Hofstede-style research issues

 Realization of cross-level studies

Consider groups, organizations, & country level
s

 Inclusion of cross-cultural differences

Consider intracultural variance

 Inclusion of theoretically relevant moderators

Consider sex, class affiliation, etc.

 Interaction between variables

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 MNC and Culture

 As MNCs become more transnational ‫بین االقوامی‬, their strategies

must address the cultural similarities and differences in their var
ied markets.

 Most MNCs have a cultural strategic predisposition toward doin

g things in a particular way.

 Four distinct predispositions have been identified: Ethnocentric,

Polycentric, Regiocentric and Geocentric.

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 The strategy for managing across cultures
 Ethnocentric
Ethnocentric predisposition is a nationalistic philosophy of management where
by the values and interests of the parent company guide strategic decision
s.
 home-country dominated -- culture prevail
 The belief that ones culture is superior to other cultures. It is the belief that
one’s own culture represents the only true and good way and, therefore, hi
s own culture is the best.

 Polycentric
Polycentric predisposition is a philosophy of management whereby strategic de
cisions are tailored to suit the cultures of the countries where the MNC ope
rates.

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 The strategy for managing across cultures(con…)

 Regiocentric
Regiocentric predisposition is a philosophy of management whereby the firm tri
es to blend its own interests with those of its subsidiaries on a regional basi
s.

 Geocentric
Geocentric predisposition is a philosophy of management whereby the compan
y tries to integrate a global systems approach to decision making.

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 The strategy for managing across cultures(con…)

 Strategy:
 Ethnocentric: Global integration
 Polycentric: National responsiveness
 Regiocentric: Regional integration and national responsiveness
 Geocentric: Global integration and national responsiveness

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 Unique Strategies For Different Cultures
A number of factors are helping facilitate this need to develo
p unique strategies for different cultures, including:
 A continual demand by local customers for differentiated product
s, as in the case of consumer goods that must meet local tastes.
 The importance of being an insider, as in the case of customers
who prefer to buy “local product.”
 The difficulty of managing global organizations, as in the case of
some local subsidiaries that want more decentralization and oth
ers that want less.
 By responding to cultural needs of local operations and customer
s, MNCs find that regional strategies can be used effectively in
capturing and maintaining worldwide market niches.

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THANK YOU

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